PDVSA will take over Chevron’s oil operations in Venezuela after the U.S. revoked Chevron’s sanctions waiver. As part of its strategy, PDVSA aims to sustain heavy crude production and redirect exports, amidst efforts to manage the implications of U.S. policy changes.
The state-owned oil company PDVSA of Venezuela is set to assume full operational control over Chevron’s joint ventures, following the recent revocation of Chevron’s operating license by the Trump Administration. According to a document obtained by Reuters, PDVSA plans to independently produce crude oil from these ventures after the U.S. sanctions waiver allowing Chevron to operate in Venezuela was terminated.
President Trump justified the termination of the waiver by emphasizing the absence of electoral reforms in Venezuela and inadequate measures regarding migration issues. On Truth Social, he remarked, “We are hereby reversing the concessions that Crooked Joe Biden gave to Nicolás Maduro… which have not been met by the Maduro regime.” Following this policy change, Chevron has been given 30 days to cease its operations in Venezuela and wind down its exports by April 3.
Previously, Chevron had been exporting approximately 200,000 barrels per day (bpd) of heavy crude from Venezuela to the U.S. under the 2022 sanctions waiver. With the waiver now cancelled, PDVSA is preparing to manage operations independently. The state oil firm has devised three operational scenarios projected for post-April 3, estimating the production of between 105,000 and 138,000 bpd of Hamaca heavy crude from the Petropiar site in the Orinoco Belt.
This production forecast aligns with recent output levels. PDVSA intends to utilize part of the Hamaca crude for domestic refining while exporting the remainder to non-U.S. markets. Additionally, the company aims to enhance its supply of diluents, essential for upgrading heavy crude to ensure operational continuity via pipeline transport. The foremost priority of PDVSA is to maintain production stability at Petropiar to avoid the decommissioning of any oilfields or heavy crude upgraders.
In summary, PDVSA is transitioning to full control of operations previously held by Chevron following the revocation of Chevron’s sanctions waiver. The Venezuelan state oil firm is implementing strategies to sustain oil production levels, emphasizing the need for stability while redirecting exports away from the U.S. market. This move highlights the complexities of international oil operations amid shifting political landscapes.
Original Source: oilprice.com
